How much to live on

Pat38493

Albermarle said:

Albermarle said:

BooJewels said:

You get lower unit rates for paying by Direct Debit - they charge higher unit rates by other payment methods, such as cheque etc.

As I understand it, you pay the same lower unit rates for both regular monthly DD (1/12 of your annual bill) or variable DD (actually billed for the units used each month, so more in winter, less in summer) - the latter of which would avoid building up credit, which is what you were objecting to.  So you can switch to variable DD and retain the same advantageous unit prices.

That is not what the link says, although I think to be sure someone will have to check with Octopus. 

I pay the same each month ( although I adjust it every now and again). My average credit with them is probably around £300 , so I am losing £1 a month in potential interest. However apparently/maybe gaining £80 a year( which I was not aware of before this thread)

For info I am paying
for Electric - 48 p a day standing charge and 28.79 p per unit
for Gas - 27.5p a day standing charge and 7.52p a unit.

Just checked the Octopus website and app out of interest.
No mention of variable direct debit at all, so no way to confirm or deny the £80 surcharge
Now I notice the link supplied was a blog about cost of living issues, so it is a little bit hidden away .

I also have seen that Octopus claim that by the end of March , the average DD customer actually owes them over £200, so if this was true it reduces the benefits further of variable direct debit.

I would be interested in any confirmation or not of this £80 charge.

I suspect it's a confusion and the £80 is for non DD methods of payment.

I've been told in the past:
- You have to contact Octopus directly to go on variable DD.
- I am pretty sure when I asked them about it around 6 months ago, they told me there was no extra charge for this payment method but it was a good while back.

After today's DD I will be 3 months in credit in mid February so I am obviously paying way too much right now - I am not sure if Octopus will fix this automatically after I have a year of history or if I need to contact them.

QrizB

There are many - I was going to say dozens, but that's an exaggeration - folk on the Energy board who pay by monthly variable DD, and they pay the same tariff as fixed DD customers do.

I'm going to tag @Gerry1 here as he's one of them and is a regular contributor.

BooJewels

That was the basis for my comments too @QrizB - posting on the Energy forum would certainly suggest that regular monthly DD and variable monthly DD are charged the same unit prices - and posters a page back already said the same, but I didn't see those until after I'd first posted. 

I was interested myself as I was contemplating doing this as my monthly bill (electricity only) is very similar month on month - but I have a perpetual credit balance with them - that could be earning me a few pennies in interest.

There is no '£80 charge' - just that other payment methods get charged a slightly higher unit price, which for the average household increases their annual bill by around £80 - so by paying by DD you can potentially save an average of around £80.

Gerry1

Thanks @QrizB.

Yes, for umpteen years I've always paid by Variable Direct Debit.  It makes bills simpler, gives earlier warning of unexpectedly higher consumption and doesn't cost any more.  Paying for the exact amount you use is how virtually everything else works, so I see no reason to pay for my energy usage differently.

Of course, Variable DD may not be ideal for everyone; some prefer Fixed DDs because it helps their budgeting.

However, FDDs can give a false sense of security.  There's a widespread misunderstanding that it's All You Can Eat: most months there are posts on the Energy forum complaining that 'I'm on a FDD but it's just been doubled !'.

Worst of all is having FDDs with quarterly or six-monthly billing: there can be unexpected catch-up bills when a large apparent credit balance has suddenly wiped out when a bill is eventually issued.  But FDDs are less fixed than ever, given that most consumers are now on a Standard Variable Tariff where the price cap changes every three months.

If dozy Ofgem were any good they'd change the terminology from Fixed DDs to Equal DDs (FDDs get confused with Fixed tariffs), and then level the playing field by requiring all suppliers to offer both Variable and Equal DDs.

Organgrinder

Ok. Have just spoken to Octopus who initially told me the unit rates were indeed different.

However it turns out this is not the case at all and unit rates remain the same.

Now however the best part.

They've set my billing date to be 14 days before my DD date.

As I have enough in my account to cover this month I'll have no payment next month and my forecast for the following month is the same as my old monthly payment.

From then on I'll be paying less which will go into a savings account. I'll use this in the winter months to help pay the higher bills.

So not only will I earn interest I've unlocked the credit I have with them. :-)

trevjl

Have emailed them to ask about doing it, will see what they come back with

Albermarle

I also have seen that Octopus claim that by the end of March , the average DD customer actually owes them over £200, That they owe the average DD customer over £200 by the end of March, so if this was true it reduces the benefits further of variable direct debit.

I am quoting from my own post as I made a significant mistake. Corrected above.

Further analysis of my credit account, shows that I am losing around 75p a month in interest, by having the fixed direct debit. Hardly worth even typing this post about !

Organgrinder

The point for me is that i don't let any other business keep £200-£300 of my money so why should I let Octopus do so? 

Albermarle

Organgrinder said:

The point for me is that i don't let any other business keep £200-£300 of my money so why should I let Octopus do so? 

Well Octopus claim that for part of the year you are keeping some of their money, as at the end of Winter you should have a negative balance.
I suppose that is more likely if you adjust the fixed payments from time to time, and keep them on the lower side.
For the sake of a few Pounds a year I prefer the payment to be the same every month, as it helps my general budgeting.

@Pat38493

You can adjust the DD payment on the website/app. I think if you try to fix it too low it will block you, but I have put it down by £50 a month before now ( in anticipation of lower bills) with no issue.

BooJewels

Whilst that's certainly true @Organgrinder and in the past, when I've been living hand to mouth, I definitely couldn't afford to.  I lose a bit over a quid a month in interest on the credit - but I also quite like having the buffer of knowing that my energy costs are covered - just for eventualities like now, where I can't submit a meter reading, as I can't get down the cellar steps.  I think that's worth a quid each month - to me.